Investing for Beginners (Investing 101)

What is investing?
Investing is setting money aside today in order to receive more money in the future after inflation.

Who should invest?
If you have no debt and have an adequate emergency fund, you should invest. Generally speaking, an adequate emergency fund is three to six months of living expenses.

Why you should invest?
Money sitting in a savings account is a guaranteed way of losing purchasing power due to inflation.

Here are some what some things cost in 1963:

Car: $2,300

House: $19,300

Gas: $0.30

Bread: $0.21

Gallon of milk: $1.04

Stamp: $0.04

Coke: $0.05

McDonald’s burger: $0.15

When should you invest?
Now!!! To see how much $100,000 can grow to over 30 years, please see the table below:

1% avg return per year

3% avg return per year

6% avg return per year

8% avg return per year

10% avg return per year

Now

$100,000

$100,000

$100,000

$100,000

$100,000

30 years from now

$134,785

$242,726

$574,349

$1,006,266

$1,744,940

As you may have noticed, a few percentage points make a big difference. In the early years, you may not notice a difference, but in the long run, the difference is very significant. Think of this as if you were rolling a snowball down a mountain. Rolling a snowball in a savings account is like rolling it in a flat part of the bunny slope.

Where/How should you invest?

Stay tuned. More posts to come.

Ask yourself, “What is holding you back from investing?”

If you have any questions, please leave a comment so I can answer it on future posts.

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Wealtharch Investment Services is a registered investment adviser. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any securities. Investments involve risk and are not guaranteed. Be sure to consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed herein. View our privacy policy here.